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Judgment
V.B. Gupta, J.
In this appeal, appellants have raised following questions for consideration;
(a) Whether the impugned judgment is contrary to the law laid down by Supreme Court in E.S.I.C. Vs. C.C. Santhakumar,
(b) Whether demand was time barred u/s 77A Explanation (b) of Employees State Insurance Corporation Act, 1948 (for short as "Act").
Brief facts of this case are that respondent filed a petition u/s 75 of the Act, for declaring demand notice dated 7th June, 1995 as null and void. Plea of the respondent was that demand is time barred and pertains to the period 1977- 78 and 1981-82.
Appellants in their written statement gave details of the demand and corresponding period for which it was raised, which reads as under;
Details of Rs. 30582.64
Rs. 29611.25- Regular Contribution for the period from 4/82 to 3/83
Rs. 68.70- Short stamping for period 7/77, 9/77, 11/77, 1/78 and 5/78
Rs. 17.25- Short stamping for period ending 1/81 to 3/81.
Rs. 43.30- Short contribution for 6/81, 8/81, 10.81 and 3/82.
Rs. 649.57- Adhoc contribution on Rs. 9279.50 paid during 1981-82.
Rs. 192.37- Interest for late subms of contribution for period ending 3/80 to 11/80, 1/81, 9/81 and 11/81.
It is contended by learned Counsel for appellants that period of limitation as envisaged u/s 77 of the Act is not applicable in the present case, since no applications was filed by appellants before the ESI Court for commencement of proceedings u/s 77 of the Act. Appellants. counsel in support of its contention, relied upon decision of Santa Kumar (Supra).
Section 75 of the Act deals with matters to be decided by the Employees. Insurance court. Relevant Provision in this case is Clause (1)(g) of this Section, which reads as under;
Section 75(1)- Matters to be decided by Employees'' Insurance Court- (1) If any question or dispute arises as to-
(a) to (ee) xxx xxx xxx xxx
(g) any other matter which is in dispute between a principal employer and the Corporation, or between a principal employer and an immediate employer or between a person and the Corporation or between and employee and a principal or immediate employer, in respect of any contribution or benefit or other dues payable or recoverable under this Act, [or any other matter required to be or which may be decided by the Employees. Insurance Court under this Act], such question or dispute [subject to the provisions of Sub-section (2A)] shall be decided by the Employees. Insurance Court in accordance with the provisions of this Act.
(2) xxx xxx xxx xxx
According to this Section, if there is dispute between "a principal employer and the Corporation", the same shall be decided by the Employees. Insurance Court, under the Act.
Section 77 of the Act provides the period during which proceedings can commence before an Employees. Insurance Court. Relevant Provisions of this Section reads as under;
Section 77. Commencement of proceedings-(1) The proceedings before an Employees. Insurance Court shall be commenced by application.
(1A) - Every such application shall be made within a period of three years from the date on which the cause of action arose.
Explanation - For the purpose of this Sub-section,-
(a) xxx xxx xxx
(b) the cause of action in respect of a claim by the Corporation for recovering contributions (including interest and damages) from the principal employer shall be deemed to have arisen on the date on which such claim is made by the Corporation for the first time: Provided that no claim shall be made by the Corporation after five years of the period to which the claim relates;
(c) xxx xxx xxx
(2) xxx xxx xxx
In the present case, respondent received the impugned demand in the year 1995, for the period 1977-78 and 1981-82. On receipt of this demand, respondent filed petition u/s 75 of the Act. Vide impugned judgment, trial court decided the petition in favour of respondent, holding it time barred.
In Santa Kumar (Supra), Supreme Court observed;
Section 77 of the Act relates to commencement of proceedings before the ESI Court. The proviso to Sub-section (1A)(b) of Section 77 of the Act cannot independently give any meaning without reference to the main provision, namely, Section 77 of the Act. Therefore, the proviso to Clause (b) of Section 77(1A) of the Act, fixing the period of five years for the claim made by the Corporation, will apply only in respect of claim made by the Corporation before the ESI Court and to no other proceedings.
It is true that proceedings in the present case commenced on the basis of petition of the respondent. However, as per Section 77 (1A)(b) of the Act, "the cause of action in respect of a claim by the Corporation for recovering contributions (including interest and damages) from the principal employer shall be deemed to have arisen on the date of which such claim is made by the Corporation for the first time".
Appellants by virtue of demand notice of Year 1995, is claiming contributions (including interest) for the period 1977-78 and 1981-82. This demand has been made by the appellants for the first time on 9th June, 1995. As per proviso to Section 77(1A) of the Act, "no claim shall be made by the Corporation after five years of the period to which the claim relates." Since, claim relates to the period 1977-78 and 1981-82 and same was made in the year 1995, that is, more than eighteen years since the claim became due, the same is time barred as per proviso to Section 77 (1A) of the Act.
Under these circumstances, the impugned demand of the appellants is hopelessly time barred. Hence, there is no infirmity or ambiguity in the impugned judgment of the trial court.
Present appeal therefore, is not maintainable and same is dismissed.